China the expanding market for world soybean production
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China: the expanding market for world soybean production. By Qingyun Xu. Introduction. World soybean production and consumption Although there are more than 50 countries cultivate soybeans in the world, the majority of soybean production is concentrated in only a few countries.

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China: the expanding market for world soybean production

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China the expanding market for world soybean production

China: the expanding market for world soybeanproduction

By Qingyun Xu


Introduction

Introduction

  • World soybean production and consumption

  • Although there are more than 50 countries cultivate soybeans in the world, the majority of soybean production is concentrated in only a few countries.

  • The United State, Brazil, Argentina and China are four main soybean producers which account for more than 90 percent of the total soybean production in the world


Table world soybean supply and distribution thousand metric tons

Table: World soybean supply and distribution[Thousand Metric Tons]


The world production and consumption of soybean consistently increased since 1960s

The world production and consumption of soybean consistently increased since 1960s


Overview of world soybean trade and imports boom in china

Overview of world soybean trade and imports boom in China

  • World soybean trade

    • International trade of soybeans and soybean products also rises dramatically in recent years.

    • Total world imports of soybeans in 2006/07 reached 69,126 thousand Metric Tons


China the expanding market for world soybean production

  • China’s soybean imports

    • China became a world net importer of soybeans since 1996

    • Rapid increasing in domestic demand of soybeans made China become the world largest importer of soybeans since 2003 instead of European Union.

    • China’s imports of soybeans achieve 31,500 thousand Metric Tons in 2006/2007 accounting for about 40% of world total imports.


Factor analysis of china s soybean imports boom

Factor analysis of China’s soybean imports boom

  • Soybean production and domestic market in China

  • China’s soybean production is uncompetitive compared with other large producers such as U.S., Brazil and Argentina for:

    • the relative lower yield in soybean production

    • and the limitation in arable land for soybean cultivation in China


China s domestic soybean market

China’s domestic soybean market

  • The sharply growth in soybean domestic demand is the key driver of soybean imports boom for China.

  • The domestic soybean demand stimulated by the following factors:

    • Personal income growth, urbanization and population growth

    • The improvement of China’s soybean processing industry


China s domestic soybean market1

China’s domestic soybean market

  • Both the limitation of domestic soybean supply and the increasing of domestic demand contribute to the disequilibrium of domestic soybean market in China.

  • Domestic demand largely surpasses the domestic supply let China’s soybean consumption largely rely on the international supply.


China s political environment for soybean imports boom

China’s political environment for soybean imports boom

  • The impact of China’s agricultural trade policies on soybean imports before accession to WTO:

    • China’s trade liberalization policy in soybean and soybean products trade in 1990s.

    • China allow soybean imports to enter at a tariff as low as 3% since the middle of 1990s.

    • China’s government lifted and re-imposed value added tax (VAT) on imported soybean meal.


China s agricultural trade policies after accession to wto and its effect on soybean imports

China’s agricultural trade policies after accession to WTO and its effect on soybean imports

  • China joined the World Trade Organization (WTO) on November 11, 2001 and became the 143rd member of WTO.

  • To fulfill its commitments as a member of WTO, China’s government adjusted its agricultural trade policies in many fields.

    • Reduction of import tariffs on agricultural and food products.


China the expanding market for world soybean production

  • China established annual import quotas (TRQ) for selected key commodities, including wheat, rice, corn, vegetable oils, cotton, sugar, and fertilizer.

  • China reduced or eliminated import and export monopolies of many agricultural commodities by state-owned trading enterprises to access trade liberalization.


China the expanding market for world soybean production

  • the non-tariff barriers such as China’s biotechnology and food safety regulations in 2002 had extremely impacts on its soybean imports


Conclusion

Conclusion

  • China’s demand for soybean imports continues to look strong and provides favorable opportunities for world soybean exporters, especially for U.S.


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